FTC Regulations
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The Federal Trade Commission (FTC) enforces consumer protection laws and safeguards consumers from "unfair and deceptive" marketing.

FTC compliance lawyers work with parties under investigation by the agency.

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FCC Statutes & Regulations

Companies that use digital marketing techniques should also be aware of the:

  • 1991 Telephone Consumer Protection Act (TCPA)
  • 2003 National Do Not Call Registry (DMC)

The FCC oversees all U.S. telephone marketing and monitors compliance with the National DNC Registry. The majority of states have also created statewide DNC lists. DNC Registry regulations include updating company records monthly to reflect the latest data in the Do No Call Registries.

Note: Telemarketers may contact DNC registrants with whom they've done business in the previous 18 months. They may also call DNC registrants who've inquired with them during the previous 3 months.

Exceptions to the National DNC Registry regulations include charitable and political organizations. Though campaign calls fall under First Amendment rights and aren't subject to most DNC rules, charities must keep an organizational do not call list for contacts who opt out.

FTC Statutes & Regulations

  • The 1995 Telemarketing Sales Rule (TSR) with subsequent amendments
  • The 2003 National Do Not Call Registry
  • The Dot Com Disclosures
  • Native Advertising Guidelines
  • Section 5 of the FTC Act ("unfair and deceptive marketing")

FTC regulations prohibit telemarketing campaigns from including:

  • Offers of free trials followed by automatic charges;
  • Book/CD club offers;
  • Automatic customer billing;
  • Email or fax marketing resulting in inbound phone calls;
  • The use of already acquired customer account data.

Other FCC and FTC rules that govern telemarketing and electronic marketing practices include:

  • Predictive dialers: abandoned calls must be limited to three percent or less overall.
  • Automated systems must give contacts a minimum of four rings to answer before hanging up.
  • Telemarketers may not mask their caller IDs.

Common Questions About FTC Regulations

FTC Regulations FAQ FTC Answer Marketing Lawyer's Explanation
I market a weight loss product. I've heard, through the grapevine, that lots of people drop pounds easily and quickly using the product I push. Can I just make up reviews to reflect what I've heard about the product through word of mouth? "... the basic truth-in-advertising principle that endorsements must be honest and not misleading." No, you cannot fabricate reviews or testimonials on commercial websites. They must be true and furnished by real people about their actual experiences.
My brother created a weight loss pill that I use, love and pay full price for. If I endorse his product online or on social media, do I have to disclose the fact that I'm related to the product's creator? "if an ad features an endorser who's a relative or employee...that ad is misleading unless the connection is made clear." Even if your family members pay full price for your service or product because they love it, relatives still have to disclose the relationship in a public review or testimonial.
Some of reviews I use come from people who have experienced better than average results using the product I market. In my advertising and promotional material, must I have disclose that their results aren't typical? "If the advertiser doesn't have proof that the endorser's experience represents what people will generally achieve using the product as described in the ad (for example, by just taking a pill daily for two months), then an ad featuring that endorser must make clear to the audience what the generally expected results are." Burying a "results not typical" clause in the fine print of a disclaimer, which is already behind a barely noticeable link, in the footer of your site, is not good enough. If your spokespeople experienced unusually good results, which are not typical of the average user, this fact must be disclosed, conspicuously, right near the claim. It must be noticeable to the average reader.
The FTC's marketing guidelines apply to "commercial speech". What qualifies as commercial speech? "If an endorser is acting on behalf of an advertiser, what she or he is saying is usually going to be commercial speech." Most FTC rules and regulations apply only to "commercial speech". What constitutes commercial speech? Any statements used to market or sell anything.
What law, exactly, does the FTC use to charge marketers who don't adhere to promotional guidelines? "...commercial speech violates the FTC Act if it's deceptive. The FTC conducts investigations and brings cases involving endorsements under Section 5 of the FTC Act, which generally prohibits deceptive advertising." The punitive power of the Federal Trade Commission lies mainly in the FTC Act. Specifically, Section 5 addresses issues related to unfair and deceptive marketing.
I participate in a blogger-marketer network. Marketers send me free offers and products in the hopes that I'll write about them. Do I have to tell readers that I got a product for free if I blog about it? "If a blogger or other endorser has a relationship with a marketer or a network that sends freebies in the hope of positive reviews, it's best to let readers know about the free stuff." If you're given products for free or given discounts, in exchange for positive reviews, let your readers know. Even if you don't write a positive review, you should let people know that you did get the product (or service) for free or at a discount.
I'm a food blogger that gets free meals to blog about restaurants. Do I have to disclose that fact every time I make a blog post? "If you get free meals, you should let your readers know so they can factor that in when they read your reviews." Yes. Every time you write a post about a meal you got for free, you must let readers know that the you got a "free lunch".
Can I offer discounts or other incentives in exchange for Facebook "likes"? "Advertisers shouldn't encourage endorsements using features that don't allow for clear and conspicuous disclosures. However, we don't know at this time how much stock social network users put into "likes" when deciding to patronize a business, so the failure to disclose that the people giving "likes" received an incentive might not be a problem". This is where online marketing rules get murky. Regulators still haven't figured out how to treat "likes" and other types of social media upvotes. Notice how they use the phrase "might not be a problem"? Well, that phrase presents a problem for marketers because there is no clear-cut line. You may be busted for engaging in a like-for-discount program, or you might not. Before you launch a social media drive, consult an online marketing lawyer. He or she will let you know whether your campaign is FTC safe or if you need to change a few elements.
Can I buy Facebook "likes" for my business? "An advertiser buying fake "likes" is very different from an advertiser offering incentives for "likes" from actual consumers. If "likes" are from non-existent people or people who have no experience using the product or service, they are clearly deceptive, and both the purchaser and the seller of the fake "likes" could face enforcement action." No. It is against regulations to buy Facebook likes. It's deceptive and, therefore, considered "unfair and deceptive marketing".
How detailed must I get with disclosures alerting consumers that I got a product or service for free, in exchange for an honest review? A simple disclosure like "Company X gave me this product to try . . ." will usually be effective. The purpose of disclosure is to let consumers know of any material connection that may affect a reviewer's opinion. They aren't meant to be long, legalese-ladden nightmares. A simple, clear explanation usually satisfies the FTC.
I do video marketing and streaming marketing. If I just put a disclosure in the video description, is that sufficient? "No, because it's easy for consumers to miss disclosures in the video description. The disclosure has the most chance of being effective if it is made clearly and prominently in the video itself." And "It's more likely that a disclosure at the end of the video will be missed, especially if someone doesn't watch the whole thing. Having it at the beginning of the review would be better. Having multiple disclosures during the video would be even better. No, simply putting a disclosure in a video decription field (like on YouTube) is not enough. Preferably, you should make disclosures throughout your video, but at the very least, it should be at the very beginning.
Can I hide my disclosures behind a hyperlink? "No. A hyperlink like that isn't likely to be sufficient. The disclosures we are talking about are brief and there is no reason to hide them behind a hyperlink." Hiding disclosures behind a hyperlink doesn't cut it. They must be clear and conspicuous.
Twitter only allows 140 characters. How can I fit a disclosure with such limited space? "The words 'Sponsored' and 'Promotion' use only 9 characters. "Paid ad" only uses 7 characters. Starting a tweet with 'Ad:' or '#ad' -- which takes only 3 characters -- would likely be effective." Use the #ad hashtag, it's only three characters. The FTC doesn't care about the limited space on Twitter.
I'm about to launch a social media marketing campaign; people will be compensated for their digital promotion efforts. I've named my campaign XYZ_Rocks, and my brand followers are well aware of the XYZ_Rocks campaign. As such, is it sufficient to just use the hashtag #XYZ_Rocks as the endorsement disclosure on Twitter (or other social media platforms)? "Readers would not understand such a hashtag to mean that those posts were made as part of a contest or that the people doing the posting had received something of value (in this case, a chance to win the contest prize). Making the word "contest" or "sweepstakes" part of the hashtag should be enough. However, the word "sweeps" probably isn't..." No. Just using a campaign's name as an endorsement disclosure is not good enough. If you're promoting a contest, use "#contest". If you're running a sweepstakes, use "#sweepstakes" (not #sweeps). If someone is materially compensated in any way for a promotional tweet or social media post, the person should use #ad, #paidad or #sponsored.
I'm confused, am I allowed to use genuine client testimonials to promote my product or business, or do I even have to disclose those? "Yes, you can ask your customers about their experiences with your product and feature their comments in your ads." So long as you don't materially compensate a party for their endorsement, you don't have to worry about endorsement rules and regulations. Standard, genuine client testimonials are perfectly fine to use. (they stilll must be truthful, and you should still get an affidavit from them)
What if I hold a roundtable to elicit customer opinions? If they agree to attend, can I pay them for their time, but also use any positive things they say in marketing material without disclosing they were paid to attend the roundtable? If they have no reason to expect compensation or any other benefit before they give their comments, there's no need to disclose your payments to them. If participants don't know that they will be compensated, and they've given all their responses prior to discovering that they will be compensated, then you don't have to disclose payments to them. If, however, you inform them beforehand that they will be compensated for their time, you do have to disclose that information.
I use social media "influencers". If they fail to disclose that I compensate them for promoting my brand, am I responsible? "Your company is responsible for any failures by the influencers you pay to adequately disclose that they received payments for their endorsements." Yes, you are responsible for the errors of your influencers in promoting your brand.
Is writing "affiliate link" next to one of my affiliate links a sufficient disclosure? "affiliate link" is not a satisfactory disclosure. No, it is not.
I work for a company and genuinely love the product. Do I have to disclose that I'm an employee every time I talk positively about the company online? What if I simply list my employer on the profile pages of my social media accounts? Is that enough of a disclosure? Listing your employer on your profile page isn't enough. After all, people who just read what you post on a review site won't get that information. No, simply naming an employer on your profile page is not enough of a disclosure. The FTC considers employment a material connection. As such, every time you wax positively about your company or its products online, you need to disclose your employment connection. (If, of course, your comment is part of a promotional campaign.)
I'm the [boss, marketing director, etc.] of a company. Am I responsible for employees who fail to disclose their material connection to the company when endorsing the product online or on social media? It wouldn't be reasonable to expect you to monitor every social media posting by all of your employees. However, you should establish a formal program to remind employees periodically of your policy, especially if the company encourages employees to share their opinions about your products. Of course you can't hold every employees' hands, all the time. But make sure you have a system in place to remind your team of the FTC's endorsement guidelines. Even a monthly email reminder is a start.
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